Government Response

The Government responded to this petition on Tuesday 8th October 2019

Committal to prison for non-payment of council tax can only occur where the court is satisfied that the debt is due to the wilful refusal or culpable neglect of the liable individual.

Every year, councils issue nearly 24 million council tax bills to help fund key local services, from adult social care and children’s services, to refuse collections and leisure facilities. Uncollected tax means less money for services and higher bills for residents who do pay on time.

However, imprisonment should only ever be the last resort for non-payment of council tax. Local authorities should consider carefully the reasons for non-payment before seeking a committal warrant from the magistrates’ court, which can only issue a warrant if it is satisfied that the reason for non-payment is wilful refusal or culpable neglect. Committal is not appropriate unless the court is satisfied that the reason for non-payment meets these strict tests.

As the Local Government Minister announced in April this year, the Government wants to bring in a more effective council tax collection system which treats people more fairly, while ensuring the money required to fund public services is collected. It recognises consideration of personal circumstances can help a person’s financial recovery. The Ministry of Housing, Communities and Local Government has been engaging with charities, debt advice organisations and local authorities to gather evidence on current practice and on possible changes to improve council tax collection.

There all already a wide range of discounts and exemptions to help people who might otherwise struggle to pay. In particular, every local authority must have a council tax reduction scheme to provide support to people who might otherwise have difficulty paying their bill. As a result, many householders either receive a greatly reduced bill or, for example in the case of pensioners with limited savings, do not need to pay any council tax at all.

There is a well-established process in place that councils should follow when residents fall behind with their instalments. The Government has published guidance for local authorities to follow when they are taking action to collect council tax arrears. This guidance highlights the importance of authorities being sympathetic to those in genuine hardship.

When a payment is missed, authorities issue a reminder notice to encourage the resident to contact them and agree a repayment plan. If the authority is not contacted, they will send a final reminder. If there is no response to the final reminder and the council is not able to agree a repayment plan, they will then consider issuing a court summons. The court hearing gives residents an opportunity to respond to the council if they believe that there has been an error in the calculation of the bill. If the court decides that the resident is liable for the bill and a repayment plan is still not agreed, it will issue a liability order. This order provides authorities with a range of options that they can use to clear the debt. These options include applying for orders that allow deductions to be made from a resident’s income and referring the case to enforcement agents.

Before authorities can consider applying to commit an individual to prison, they must first exhaust the option of using enforcement agents to try to recover the debt. This would involve the agent attempting to contact the resident and put in place a repayment plan or to take control of goods that can be sold to repay the debt. Throughout this whole process, including when enforcement agents are engaged with the resident, authorities should be willing to negotiate a repayment plan. In the most recent period for which figures are available (2017-18), 34 committal orders were issued as a result of proceedings for non-payment of council tax.

More generally, everyone must pay their fair share of tax, regardless of wealth and status and no one is above the law. HMRC’s criminal investigation policy is published on GOV.UK. HMRC do not take an individual’s wealth or background into account deciding whether to pass a criminal investigation to the Crown Prosecution Service. HMRC has specifically built its capability to triple its prosecutions of the most serious and complex tax frauds since Summer Budget 2015 and currently has over 300 wealthy individuals either under criminal investigation, at trial or undergoing confiscation proceedings.

Ministry of Housing, Communities and Local Government.